Netherlands flag Netherlands: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Netherlands is the sixth-largest economic power in the Eurozone and the fifth-largest exporter of goods. The country is very open to trade and consequently to the global economic conjuncture. For the past few years, the recovery in Europe has allowed the Dutch economy to grow at a dynamic pace, although trade uncertainty at global level, the Brexit process and most of all the spread of the COVID-19 pandemic caused the Dutch economy to contract. Nevertheless, the Dutch economy has shown a rapid and strong recovery from the coronavirus recession of 2020, recording an estimated growth of 3.8% in 2021, on the back of a robust recovery in consumer demand and a favourable external environment, together with a rise in investment and government consumption. Economic growth is projected to remain robust this year (3.2%) underpinned by private consumption, before moderating to 2.1% in 2023. The scenario remains uncertain due to the surge in COVID-19 cases towards the end of the year. According to projections by the Dutch National Bank, the extension of containment measures could cut 2022 GDP growth by over two percentage points.

In recent years the government’s fiscal policy has been expansionary; nevertheless, the Dutch public finances remained sound, recording budget surpluses. The trend inverted as a consequence of the fiscal measures taken to contain the Covid-19-induced crisis, with a budget deficit of 5.2% recorded in 2021. As most measures expired and economic activity rebounded, the deficit should narrow to 1.5% this year and then again in 2023 as revenues increase (0.7% - IMF). Conversely, the debt-to-GDP ratio jumped to 58.1% in 2021 (from a pre-pandemic level of 47.4%), but is expected to follow a downward trend over the forecast period (56.2% this year followed by 54.8% in 2023). Inflation has risen sharply during the year and averaged 1.9% in 2021, driven by oil and gas price increases and a tight labour market. Temporary government measures (including cuts in energy taxes and tuition fees) should push projected inflation downwards in 2022 (1.7%).

The Netherlands presents a very high income per capita, which is distributed in a relatively equal manner. The GDP per capita is above the EU average and was estimated at USD 60,461 in 2021 (PPP – data IMF). Employment support measures were still in place for a large part of the year, resulting in a relatively low unemployment rate of 3.6% in 2021. Meanwhile, several sectors have been experiencing labour shortages, with the number of vacancies surpassing the number of unemployed. The IMF forecasts an increase in the unemployment rate in 2022 (4%); whereas the Dutch Central Bank expects wage growth to rise slowly to 2.4% in 2022 and 2.6% in 2023.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 909.071.00990.581.001.00
GDP (Constant Prices, Annual % Change) -3.94.94.50.81.7
GDP per Capita (USD) 5257565760
General Government Balance (in % of GDP) -1.3-1.9-1.2-1.4-2.1
General Government Gross Debt (in % of GDP) 54.652.348.346.445.6
Inflation Rate (%) 1.12.812.08.02.7
Unemployment Rate (% of the Labour Force) 4.94.23.53.94.0
Current Account (billions USD) 64.9091.6273.9678.4483.26
Current Account (in % of GDP) 7.19.07.57.77.7

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 GBP 1.271.141.131.111.12

Source: World Bank, 2015

 

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Latest Update: November 2022

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